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Consumer Sector Update for 02/16/2017: KATE,DENN,BBW

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Consumer stocks still were trending lower on Thursday afternoon, with shares of consumer staples companies in the S&P 500 slipping less than 0.1% while shares of consumer discretionary firms in the S&P 500 were on a 0.5% decline.

In company news, Kate Spade & Co ( KATE ) shares were surging Thursday after the women's apparel company today launched a strategic review and beat analyst estimates with its adjusted Q4 net income.

Separately, analysts at Wunderlich today raised their price target for Kate Spade by $4 to $24 a share and reiterated their Buy rating for the stock, citing the company's potential sale prospects.

The company cautioned there was no guarantee the review will result in a transaction, adding it has hired Perella Weinberg Partners to assist with the process as its financial advisors along with Paul, Weiss, Rifkind, Wharton & Garrison as its legal counsel.

Excluding one-time items, Kate Spade earned $0.41 per share, topping a $0.32 per share profit during the same quarter last year and exceeding the Capital IQ consensus by $0.07 per share. Net sales rose 9.8% over year-ago levels to $470.8 million, matching Wall Street expectations.

The company said it would not be providing forward-looking guidance during the current strategic review.

KATE shares were up more than 12% at $22.08 each, staying within a relatively close range of their $22.29-a-share session high.

In other sector news,

(+) DENN, (+12.9%) Adjusted Q4 EPS of $0.15 per share tops Street view by $0.02 per share. Revenue climbs 4.5% compared with same quarter last year to $129.61 mln, roughly in-line with the $129.43 mln consensus. U.S. same-store sales rise 0.5%, matching the company's Jan. 9 preannouncement.

(-) BBW, (-26.9%) Non-GAAP Q4 EPS of $0.31 misses analyst mean by $0.40 per share. Revenue falls 6.3% to $110.3 mln, also trailing the $126.54 mln consensus.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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